The FTSE 100 rallied a bit during the trading session on Tuesday, as we continue to see a lot of bullish pressure in stock markets around the world. That being said, the FTSE 100 has struggled with the 7200 level over the last couple of sessions, but the market does tend to move in 200-point increments, as we can see on the charts multiple times. The uptrend line underneath should continue to offer plenty of support, right along with the 7000 handle. Furthermore, the 50-day EMA is sitting right there at the uptrend line as well. In other words, this is a market that I think continues to see a lot of pressure underneath.
To the upside, if we do break above the 7200 level, it is very likely that the market could go looking towards the 7400 level. If we clear above the 7200 on a daily close, then it is likely that we will see this market reach towards the 7400 level, and quite possibly rather quickly. At this point, I like the idea of buying dips, as there are plenty of people who have been picking this market up along the way.
With so much liquidity being thrown around the system, it does make sense that stock markets continue to see a lot of buying pressure, because the bond markets will not be offering much in the way of yields, so people will be getting involved in the stock market to try to be out of inflationary pressures. Ultimately, this is a market that cannot be shorted, at least not anytime soon. That being said, if we did break down below the uptrend line, then it is possible that the market would go looking towards the 6800 level, perhaps reaching down towards the 200-day EMA.
What is interesting is that the shooting star from the session on Monday suggests that we are going to see a lot of resistance, so that adds more credence to the idea of the 7200 level being broken as yet another signal. I have no interest whatsoever in trying to short the market as I said, but would get aggressive below somewhere near the 6900 level. I think that a move to the upside would be a very bullish sign and could bring in a flood of money.
